Replies to post #149545 on Pervasip Corp (PVSP)

[Arthur]

Duh, it is a Convertible Debenture.

It sayzs so on the document. http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10961970

SENIOR SECURED, CONVERTIBLE, REDEEMABLE DEBENTURE

Section 7.01 Conversion of Debenture.
At any time and from time to time while this Debenture is outstanding on or after the Closing Date, at the sole option of the Holder upon the occurrence of an Event of Default or if mutually agreed upon by the parties, this Debenture may be convertible into shares of the Company’s common stock, $ 0.00001 par value per share (the “ C ommon Stock ”) in accordance with the terms and conditions set forth in this Article VII.

Oh, you know what else happen when Pervasip misses a payment?
There's a small Late Fee

Late Fee . If all or any portion of the payments of principal, interest or other charges due hereunder are not received by the Holder within five (5) days of the date such payment is due, then the Company shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to five percent (5%) of each such unpaid payment or sum. Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge.

But it triggers an Event of Default:

Section 3.01 Events of Default.
The occurrence of any of the following events shall constitute an “ Event of Default ” hereunder:
(i) the Company shall fail to pay any interest , principal or other charges due under this Debenture or any other Transaction Documents on the date when any such payment shall be due and payable;

...which balloons the interest rate:

Section 3.02 Remedies.
Upon the occurrence of an Event of Default that is not timely cured within an applicable cure period hereunder, the interest on this Debenture shall immediately accrue at an interest rate equal to the greater of twenty-two percent (22%) per annum or the maximum interest rate allowable by law

At 18% interest, and with a money-losing business (GBS), Pervasip will not be able to make monthly interest payments, and thus will be forced to issue billions of dilutive PVSP shares instead, with the SP tanking to $0.0001, followed by the Usual R/S.

If that scenario happens, of course, the current shareholders will lose (most of) their investment.

Another scenario, Grow Big Supply magikally become profitable, all the profits are used to repay TCA Global monthly payments, and PVSP is still broke with many other CDs that will be converted into dilutive shares.